Construction commenced on stage one of Iris Capital’s $750 million development in the East End on Tuesday, in what was heralded as a milestone day in the city’s history.

Iris Capital chief executive Sam Arnaout and lord mayor Nuatali Nelmes fronted the media at a sod-turning ceremony, where Mr Arnaout declared the development the “showpiece” of the city’s revitalisation.

“All stakeholders and Novocastrians alike would have been waiting for this day for a very long time and I think today marks the beginning of what is otherwise going to be a very exciting journey,” he said.

Stage one of the works, at the site of the former David Jones building, is expected to be complete by 2020. It will see the construction of 228 apartments across three buildings and over 3600 square metres of retail space.

Iris Capital’s CEO Sam Arnaout talks about construction of the East End development in the former DJ’s store in Newcastle pic.twitter.com/pVtHykjJt7

It’s understood some of the apartments are still for sale, but Iris Capital representatives would not be drawn on what proportion remained unsold.

The work will also feature an open piazza, a pedestrian link from Perkins to Wolfe Street and basement car parking for 295 cars.

Mr Arnaout and Councillor Nelmes downplayed concerns over the effect construction may have on existing businesses and worsening traffic congestion in the CBD, as well as the squeeze on parking once the new apartments arrive.

“We will always work with the community to minimise any impact, but with any development there are going to be levels of disruption at points in time,” Mr Arnaout said.

“I work in and around the city and I can always find a park,” Cr Nelmes added. “The park and ride we’ve set up also at Broadmeadow has taken hundreds of commuter car parks out of the city.”

Cr Nelmes argued that if people encountered congestion on King Street, they should use other routes to enter the CBD.

“Be smart about it, if you’re local and you know the streets,” she said, stressing that people needed to “stop talking the city down.”

A community consultation panel has been set up to manage the effect of the construction works, including representatives of Iris Capital and council officers.

The mall redevelopment has been split into four stages. The first stage will see a building constructed on the corner of King and Perkins Street, along with Washington House on Hunter Street and Fabric House on Wolfe Street.

All three are expected to be completed within about three months of each other.

Iris Capital, a Sydney-based development company, purchased the 1.66 hectare mall site from UrbanGrowth and GPT in late 2016.